March 25,
2018 / Per Neil
Shekhter, the luxury real estate market across the United
States has been experiencing a lower demand, lower pricing trend
recently. Market prices in major cities such as San Francisco and
Miami have slowed dramatically while the exception to this has been
the Los Angeles market which continues to grow.

The Los Angeles luxury real estate market is in high demand with a
low supply resulting in price increases of up to 40% in some highly
desired areas such as Santa Monica and Beverly Hills. This trend
has been constant for the Los Angeles market for over 5 years now
and is showing no signs of slowing or reversing.

In some highly desired locations and neighborhoods, the LA market
price values have nearly doubled over this stimulating period. What
would have been a five million dollar home five years ago could now
easily cost ten million. In 2017 alone on the Westside
of LA there were 54 houses that were closed at over $10
million dollars and currently there are nearly a dozen luxury
estates priced to sell on the market for over $80 million dollars
and there is one monster of a property, in particular, that is
expected to list near $500 million dollars this year in the LA
area.

So why the other major real estate markets across the country are
experiencing a pricing slow down why is LA going the opposite way?
It's pretty simple actually, it comes down to a huge growing demand
that is overshadowing the limited supply. Not enough new luxury
home construction has resulted in the supply depletion. Primarily
in the highest desired neighborhoods that make up the very popular
Westside of Los Angeles, Neil Shekhter points out.

As big as Los Angeles is the wealthiest individuals still desire to
be in Bel
Air, Beverly
Hills or Brentwood
neighborhoods on the westside not only because of the beauty
and charm of these affluent neighborhoods but also the convenience
of commute, great shopping, and entertainment. The rising price
trends over the past five years can largely be attributed to one
major factor for luxury home buyers, convenience. The westside
neighborhoods fulfill the demand for convenience so well that the
supply in this specific area of Los Angeles has been tapped into
heavily, according to Neil Shekhter, founder, and CEO of Santa
Monica-based NMS
Properties.

Even a flat in Beverly Hills has a teardown cost of up to $8
million dollars while a luxury condo that cost you $2,000 per
square foot a few years ago will now cost nearly $3,000 a square
foot.

Building constraints have also created a lower supply in some other
highly desired luxury areas like Malibu, Santa Monica, and Venice
while the demand has been increased with the influx of tech
employees seeking housing in the area to satisfy their need for
luxury and convenience as well.

It has become very difficult to get new development passed in these
high demand areas due to a fear of overgrowth and oversaturation
but the Los Angeles area seems to still have plenty of room for
growth and stands to do very well when compared to other luxury
markets around the world such as London, Hong Kong and New York
which are still more expensive but seem to all have an oversupply
at the time, Neil Shekhter notes.

Launching NMS Properties in 1988, Neil
Shekhter assumed the role of CEO in January 1995. The real
estate management company focuses on multi-family and mixed-use
properties in the Greater Los Angeles area and in Santa Monica.
Over the course of 2017, NMS deployed 40 furnished
apartments in Los Angeles, and Neil
Shekhter plans to triple that number in 2018. The company
currently manages some of its properties while testing a pilot
with MY
SUITE.